April 2, 2018
In November 2016, Missouri citizens voted to pass the Amendment 2 ballot measure which reimposed state campaign finance contribution limits that Missouri had abolished in 2008. But despite this vote to keep big money out of elections, a recent special election shows that large donors continue to hold sway in Missouri politics. The Missouri Alliance for Freedom-Grace River PAC (MAF-GR), GROW Missouri, and Liberty Alliance are among the many PACs that spent on the special election using money from a few wealthy donors.
Amendment 2 was challenged soon after its passage, and by May 2017, some of the campaign finance restrictions voted into law had been struck down. One invalidated restriction was the prohibition on monetary transfers between political action committees (PACs). PAC-to-PAC transfers allow donors to make major contributions that then get distributed to other committees. They often result in a lack of transparency about where a committee’s funding is coming from because the true donor is hidden behind one or more layers of disclosure. After a district court judge struck down the ban on PAC-to-PAC transfers, state PACs proliferated, as a report in the St. Louis Post-Dispatch points out.
With PAC-to-PAC transfers, donors are able to pour huge amounts of money into PACs that are then funnelled through broader networks of political groups. This “gray money” allows the original donors to expand their political influence without directly appearing to be the donor and without distributing the funds themselves.
The increased power and presence of PACs was evident in the recent state Senate special election which pitted Republican Mike Cierpiot against Democrat Hillary Shields. PACs played a large role in widely distributing huge lump sums from donors to other PACs and candidate committees, which then used them for campaigning purposes.
One of biggest spenders in the special election, MAF-GR, was founded in May 2017. MAF-GR spent over $100,000 opposing Shields, who lost the special election. MAF-GR received most of its funding from Liberty Alliance, a PAC connected to a network of conservative PACs linked to Missouri Governor Eric Greitens.
Liberty Alliance was founded in February 2017 and had no money until July 2017, when it received about $800,000. Most of the money came from the American Democracy Alliance — a conservative 501(c)(4) organization that has given grants to prominent conservative groups in the Koch dark money network — two mega-donors, and a company owned by a local millionaire.
Richard Uihlein, David Humphreys, and Herzog Railroad Services, Inc. (whose CEO is Stanley Herzog) each gave $100,000 to Liberty Alliance in 2017. In addition to giving money to MAF-GR, Liberty paid over $350,000 to Axiom Strategies LLC, a large conservative political consulting firm founded by Jeff Roe (who was recently found to have been involved in a conduit contribution scheme).
If Amendment 2 had not been repealed, Liberty Alliance would not have been able to contribute to MAF-GR, removing a degree of separation between political donors and political advertisements.
GROW Missouri is another example of a PAC that helped spread big donor influence prior to Missouri’s special election. Similar to Liberty Alliance and MAF-GR, GROW Missouri was founded in early 2017 and did not receive significant contributions until after the part of Amendment 2 that banned PAC-to-PAC transfers was overturned.
GROW Missouri received nearly all of its funding from Missouri multi-millionaire Rex Sinquefield, a prominent player in state politics who donated $100,000 in August 2017. Prior to Sinquefield’s contribution, the PAC had only received $1,608 in contributions according to its quarterly filings. After receiving the money, GROW Missouri spread it among dozens of Missouri PACs and candidate committees.
In other words, money disclosed as coming from GROW Missouri really came from Sinquefield’s pocket. GROW Missouri and Liberty Alliance are among other PACs developed after certain provisions in Amendment 2 were struck down, allowing large donors to distribute their money via PAC-to-PAC transfers.
The spending by PACs in Missouri follows a larger national trend of increasing spending by PACs and dark money organizations that sponsor campaigns for candidates where the true sources of donations — and, by extension, those seeking to influence policy — is often obscured. This trend is driven by the law. Just as Citizens United’s impact on the law led to heavier political spending, particularly by groups that don’t disclose their donors, allowing PAC-to-PAC transfers in Missouri has enabled large contributions to be easily distributed to other PACs, obscuring the identities of the ultimate donors.